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Friday, January 29, 2016

Comerica Leasing Corporation v. Bombardier Inc.

Bombardier Hit With $10M Suit Over Leased Jet AgreementsA Michigan-based financial services company slapped Bombardier Inc. with a $10 million breach of contract lawsuit in New York federal court on Wednesday, accusing the company of reneging on payment agreements for four jet aircraft at the end of their lease terms.

Bombardier Inc. was sued on Wednesday for at least $10.1 million (C$14.2 million) by a unit of Comerica Inc., after the Canadian aircraft maker was unable to find buyers for four planes whose leases had expired.According to a complaint filed in the U.S. District Court in Manhattan, Comerica Leasing Corp was the beneficiary under owner trusts that had bought the planes from Bombardier, and then leased them for 16-1/2 years to a predecessor of SkyWest Inc's ExpressJet unit.Comerica said Bombardier had guaranteed minimum residual values for the CL-600 business jets, which were developed by the former Canadair, and would make up shortfalls if it found no buyers or received only low bids within 90 days after the leases expired.But after failing to find buyers during the 90-day period, Montreal-based Bombardier breached its contractual obligations by failing to make required payments to Comerica, the Detroit-based bank unit said.Comerica is seeking just over $2.5 million for each plane, plus interest and legal fees.A Bombardier spokeswoman said the company performed in accordance with the contracts' terms, and the allegations in the complaint are without merit.The lawsuit was filed in Manhattan because the parties agreed that the dispute could be resolved there, Comerica said.Shares of Bombardier closed below C$1 on Wednesday, reflecting a shortage of new aircraft orders.The case is Comerica Leasing Corp v Bombardier Inc, U.S. District Court, Southern District of New York, No. 16-00614.Original article can be found here: http://www.reuters.com